City housing program might feel budget pinch

Federal cutbacks in the Community Development Block Grant program might force the City of Hagerstown's Community Development Department to reduce its own budget, including its purchase, rehabilitation and resale of homes to low- to moderate-income residents.

"It will have an impact, the full impact we don't know yet," said Larry Bayer, manager of the department. "We haven't really looked at how it will affect those programs (yet)."

Bayer said the city's Community Development Department receives a substantial amount of funding through the U.S. Department of Housing and Urban Development's CDBG program.

Advertisement

A HUD spokesman said Wednesday the department's budget suffered from two cuts - a 9 percent department-specific reduction and another resulting from the federal defense appropriations bill.

Bayer said the city's block grant funding was cut by about $117,000. He said he doubts the department, which this year is operating on a budget of about $2.9 million, will be able to absorb the cut without affecting programs. The city will receive $974,767 in CDBG funding for 2006.

The city department runs a number of programs, but Bayer said the home-ownership program is the department's largest undertaking annually.

Last year, he said, the department rehabilitated 15 single-family homes for resale to low- and moderate-income families, or families earning 80 percent of the median income or less. The median income for a family of four is $56,250, according to a report prepared by the Washington County Workforce Housing Task Force.

Bayer said CDBG funding is the department's largest revenue source. He said the department will need to evaluate how it will absorb the cut and what services it will need to scale back.